Thomson Reuters is betting heavily on new global IT platforms, costing billions of dollars, as it raises targets for operational efficiency gains from the 2008 merger that formed the group.
The combination of Thomson and Reuters had so far delivered $1.1 billion (£722 million) savings, the group said, as it raised cost operational efficiency targets to $1.6 billion (£1 billion) by 2011.
The company is driving hard two major new projects. WestlawNext, a revamp of Thomson Reuters’ online legal information service, which receives over a million searches a day, launched earlier this month.
Building the new service took over a thousand Thomson Reuters technology, legal and information specialists. It uses "advanced algorithms and back-end technology to advance significantly the speed, simplicity and productivity of legal research", the company said.
The company is also betting on Project Utah, a global desktop product for access to its markets data, launching this year, after a billion dollars' worth of development. The product took two years to build, and aims to create a single platform to support around two hundred Thomson Reuters financial products.
The product is expected to receive a high profile launch, when it goes live in spring. In a demonstration to investors last year, Thomson Reuters said the Utah system would be "easy to support and maintain", running on an "open, flexible platform" with easy customisation.
Chief executive Tom Glocer said this week that 2010 will be "another year of important investment for Thomson Reuters, with the final year of heavy integration spending in markets, the release of important new product platforms, such as WestlawNext in legal and Project Utah in markets", and other changes including a growth in emerging markets.
"While these investments will have a short-term impact on operating margin, they are designed to accelerate future growth and we expect operating margin to rebound in 2011," he said. The company reported annual net earnings for 2009 had fallen 34 percent to $867 million (£570 million), after around half a billion dollars of integration costs between Thomson and Reuters.
The business information giant is also rapidly cutting costs, ripping out "unnecessary" legacy systems and duplicated content databases, following the merger.
In 2008, Thomson Reuters completed the group-wide rollout of an SAP enterprise resource planning system, which among other functions performs accounting, billing and payment. It also uses Oracle, Sybase and Microsoft SQL Server technology for its content databases, and is moving to Oracle Siebel customer relationship management.
The company is currently building an in-house back office sales system, under a project called GCAP, to handle its entire selling process from sales pitches through to order processing and system provision. This stems from a project that began in Reuters before the merger.
But job losses also played a part in the cost cutting, with around 650 technology, content and back office operations jobs being lost in the last year. Thomson Reuters also established an offshore location in India to handle some of the company’s finance functions.